Foreclosures on Detroit, Michigan homes, like the ice house in the picture, brought about by: the Wall Street and mortgage companies!
Which leads to more and more bankruptcy filings.
A continuing theme on this blog, that mortgage companies criminal acts caused the foreclosure crisis.
Michigan Senator Levin gained a lot of ink by quoting scatological references in Goldman Sachs memos on the mortgage backed securities that were peddled by Wall Street.
Rating sub-prime junk as AAA, just under U.S. Government debt?
They knew what they were doing; the buyers of the junk, did not.
And now, countries, like Iceland and Greece, that bought the stuff, are effectively in bankruptcy.
Not a payment plan bankruptcy, a Chapter 7, liquidation, we do not have enough money to pay our debts, bankruptcy.
People and companies who got stuck with the securities when the music stopped playing file bankruptcy.
Financial companies were allowed to make up SIVs, Special Investment Vehicles.
Just means, we are not showing these liabilites on our books, which, of course, makes us look better.
Same as if you apply for a loan, and don’t have to list your debts.
Makes it look a lot more likely that you will be able to re-pay the loan, and that you will get the new loan.
Or, in the case of the these companies, that they get to lie to the government about their liabilities, their debts.
Wall Street also lied about the securities that they sold backed by the junk mortgages.
Of course, the mortgage brokers lied to the mortgage companies, and lied to the people borrowing the mortgage money.
To get their commission, paid up front, whether the mortgage was ever paid or not.
Greed is one of the seven deadly sins, it goes way back with us humans.
It cannot be fixed by more laws or regulations.
What they did was illegal when they did it, according to the laws on the books.
They should already have been prosecuted.
Better late than never.
Bankruptcy Filings Caused By Banks